CHESTNUT HOLLOW, LLC v. WILLIAM SULLIVAN, ROBERT SALTZMAN, RAYMOND MICHAEL DUFOUR, KEVIN MCLAUGHLIN, TOBIN SHULMAN, ERIC RUBIN, and LAURENCE ROTONDI, as they are members of the Town of Stoneham Zoning Board of Appeals, and the TOWN OF STONEHAM.

MISC 16-000479

November 28, 2017

Middlesex, ss.

VHAY, J.

DECISION

This case presents several examples of how pending litigation can cause reasonable people (and reasonable government officials) to do unreasonable things.

The disputes that are before this Court began in a previous and still ongoing lawsuit. That suit produced the decision in 92 Montvale, LLC v. Stoneham Zoning Board of Appeals, 24 LCR 461 (2016) (Sands, J.), appeal pending, Mass. App. Ct. Docket No. 2016-P-1373. The parties to that case are 92 Montvale, LLC, the owner of an office building at 92 Montvale Avenue in Stoneham, Massachusetts ("92 Montvale"); the Stoneham Zoning Board of Appeals (the "ZBA"); and the Town of Stoneham. The parties to this suit are slightly different. Plaintiff Chestnut Hollow, LLC is 92 Montvale, LLC's sister company. Chestnut Hollow owns two office buildings in Stoneham, one at 41 Montvale Avenue ("41 Montvale") and another at 38 Montvale Avenue ("38 Montvale"). The other parties to this lawsuit are the same as those in 92 Montvale, the ZBA and the Town.

The central issue in this lawsuit is whether Chestnut Hollow was entitled as of February 2016 to receive a building permit to install a free-standing monument sign at 41 Montvale. The Court suspects that had 92 Montvale not erupted prior to February 2016, Chestnut Hollow would have received its permit, but alas it did not.

To resolve the parties' disputes in this second case, this Court held a trial on November 14, 2017. Based on the parties' admissions, the testimony at trial, and the exhibits received into evidence, the Court finds these facts:

1. Chestnut Hollow and its properties at 38 and 41 Montvale are managed by Cummings Properties, LLC. Cummings also is the manager of 92 Montvale. While Chestnut Hollow and 92 Montvale, LLC are independent entities, they have a common beneficial owner (The Cummings Foundation), they are served by common Cummings Properties personnel, and they benefit from the services of Cummings Properties's in-house legal staff.

2. 41 Montvale, 38 Montvale and 92 Montvale are located in a Commercial I zoning district.

3. On February 9, 2016, Chestnut Hollow filed with the Town's building department an Application for a Permit to Erect a Sign (the "Application") and related plans (the "Plans").

4. The Application sought a building permit to erect at 41 Montvale a "monument sign," as that term is defined in the Code of Stoneham, Chapter 15, § 6.7, dated February 2012 (the "Bylaw").

5. The Application disclosed that the proposed sign would be an "on-premise" sign, as the Bylaw defines that term.

6. The proposed sign conformed to the Bylaw's area, dimensional, and setback (locational) requirements for an on-premise monument sign in a Commercial I zoning district.

7. Michael Aveni, a senior architect for Cummings, personally delivered the Application and Plans to Cheryl Noble, the Town's building inspector. He also delivered to Ms. Noble a second application, one for 38 Montvale Avenue. Chestnut Hollow proposed to erect a similar on-premise monument sign there.

8. When Chestnut Hollow filed its Application, 92 Montvale, LLC, the ZBA and the Town were embroiled in 92 Montvale. That case involved a proposed monument sign for 92 Montvale. 92 Montvale, LLC had applied for a building permit for that sign in June 2014.
Mr. Aveni had submitted the papers supporting that permit request. Cummings Properties's current president and chief executive officer, Dennis Clark, was involved with the preparation of that application and understood the business reasons for seeking approval of that sign.

9. Ms. Noble was the building inspector in June 2014. According to this Court's decision in 92 Montvale, Ms. Noble rejected the application for a sign at 92 Montvale for two reasons:

1. The proposed sign will feature LED [light-emitting diode] technology and the ability to change messages, which are proposed to change at intervals of not less than once every 8 seconds. Each time the sign changes falls under the category of a flashing sign. Flashing signs are prohibited from town.

2. These signs also have the ability to have animation and scrolling messages which are also prohibited.

92 Montvale, 24 LCR at 462.

10. Signs that use LED technology have the ability to change, over intervals determined by the operator, what the sign displays. Such signs often have the ability to display animated or scrolling messages.

11. 92 Montvale, LLC appealed Ms. Noble's denial to the ZBA. The ZBA voted not to overturn the denial. 92 Montvale, LLC (represented by Cummings Properties's in-house legal staff, as Chestnut Hollow is in this case) appealed the ZBA's decision to this Court.

12. The docket in 92 Montvale reveals that discovery took most of 2015. The docket further shows that, as of February 2016, the 92 Montvale parties were aware that they would be briefing the motions for summary judgment that culminated in Justice Sands's decision and judgment in 92 Montvale. As of February 2016, none of the 92 Montvale parties had filed motion papers.

13. Against the backdrop of 92 Montvale, Mr. Aveni supervised the preparation of the Application and the Plans for 41 Montvale. President Clark likewise was involved with the Application. Aveni purposefully omitted any reference in the Application and the Plans to changing messages, as he believed that if the Application proposed any change in message during daytime hours, Ms. Noble would deny the Application.

14. Section 6.7.7.1 of the Bylaw provides: "Applications: Application for a sign permit shall be made in writing upon forms furnished by the Building Inspector. . . . The Building Inspector may require the filing of plans (including elevations) or other pertinent information."

15. The Town's Application for Permit to Erect a Sign contains a box for "Sign Material." In that box, the Application states: "LED." The Town's form does not ask any questions pertaining to changing, scrolling or animated messages.

16. The parties dispute what occurred at Ms. Noble's offices when Mr. Aveni delivered the Application and Plans on February 9, 2016. Noble and Aveni had known each other professionally for at least ten years. They had worked on dozens of building-permit applications over that time. Each believed the other to be forthcoming.

17. Ms. Noble and Mr. Aveni briefly reviewed the application for 38 Montvale. Noble determined that the 38 Montvale application was incomplete, as a registered land surveyor hadn't stamped the application's site plan. Noble handed the 38 Montvale application back to Aveni, and gave it no further consideration that day.

18. Ms. Noble also reviewed the Application and Plans for the sign at 41 Montvale. She saw that the Application was for an LED sign. Noble knew from her 92 Montvale experience that the message on an LED sign could change. Noble thus asked Aveni: "Is this sign similar to the 92 Montvale sign that changes during the day?" Aveni replied, "Yes, it uses the same technology."

19. Ms. Noble did not ask Mr. Aveni how many times per day the message on the 41 Montvale sign would change. She inferred from Aveni's answer to the question described in ¶ 18 that the proposed sign would change multiple times per day.

20. Based on what she had inferred, Ms. Noble knew on February 9, 2016 that she would be denying the Application. Had Noble understood on February 9, 2016 that the proposed sign would change its message only once per day, and only between the hours of 1:00 a.m. and 6:00 a.m., she would have approved the Application.

21. Ms. Noble did not tell Mr. Aveni on February 9, 2016 what she planned to do with the Application. She felt she needed first to discuss with Town Counsel her intentions. Town Counsel represented the ZBA and the Town in 92 Montvale. A different attorney represents the ZBA as Town Counsel in this proceeding.

22. On March 8, 2016, in response to a request from Town Counsel, Chestnut Hollow granted an extension of time for the issuance of a written decision on the Application.

23. On April 1, 2016, Ms. Noble sent Chestnut Hollow a letter. Its first paragraph states: "This office is in receipt of your application to erect an LED Monument sign at [41 Montvale] and to change the sign multiple times per day. It is the decision of this office to deny your application. . . ." Noble gave as the reason for the denial that § 6.7.5 of the Bylaw prohibited "[a]nimated, moving and flashing signs . . . in town. The proposed sign will change multiple times violating this section of the bylaw."

24. On April 6, 2016, the Town published the first legal notice of an April 20, 2016 public hearing of the Stoneham Planning Board to consider a proposal to amend the Bylaw. In early May 2016, Town Meeting approved a Bylaw amendment that expressly prohibits signs that use LED displays with technology allowing for changeable text or messaging. Chestnut Hollow did not learn of the amendment until May 12, 2016.

25. On April 19, 2016, Chestnut Hollow appealed to the ZBA from Ms. Noble's denial of the Application.

26. The official notices of the ZBA's proceedings on Chestnut Hollow's April 19 appeal, as well as the ZBA's agendas for each hearing at which the ZBA considered that appeal, describe the appeal as seeking a "variance" for an LED monument sign at 41 Montvale. The notices and the agendas are wrong: the April 19 appeal was solely from Ms. Noble's denial of the Application, and the appeal sought only to overturn the denial.

27. On July 28, 2016, the ZBA overturned Ms. Noble's denial, on the grounds that the Bylaw (prior to the May 2016 amendment) allowed erection of an LED sign provided that it changed its message only once per day, and only between the hours of 1:00 a.m. and 6:00 a.m. The Bylaw requires all "illuminated signs" in a Commercial I district to be turned off during those hours.

At the [ZBA's] hearing/meeting on June 23, 2016, counsel for [Chestnut Hollow] agreed that the message of the sign would not change in between the hours of 6 a.m. and 1 a.m. daily, but such changes would be limited to the hours when the sign may not be illuminated under the Zoning Bylaws, between 1 a.m. and 6 p.m. Based on this representation and the agreement of counsel . . ., and subject thereto, it was voted 4 for and 1 [against] to overturn the building inspector[']s decision, dated April 1, 2016.

29. The language that appears in bold in ¶ 28 does not reflect what the ZBA decided. That language should have read "between 1 a.m. and 6 a.m."

30. The Decision further asserts that the "representation and the agreement of counsel" described in ¶ 28 was "referenced and acknowledged as an oral amendment of [Chestnut Hollow's] petition/application. . . ." Chestnut Hollow did not orally amend its April 19, 2016 appeal to the ZBA, but counsel for Chestnut Hollow did tell the ZBA at a June 23, 2016 hearing on the appeal that restricting changes to the message on the 41 Montvale sign to the hours in which an illuminated sign had to be off, between 1:00 a.m. and 6:00 a.m., "makes good sense to me."

31. The ZBA issued a notice in conjunction with its Decision. That notice appeared on a form captioned "Notice of Variance/Conditional or Limited Variance or Special Permit (General Laws Chapter 40A, Section 18 as amended)." It stated: "Notice is hereby given that a Conditional or Limited Variance or Special Permit has been granted to [Chestnut Hollow]." This notice was incorrect, for the reasons set forth in ¶ 26.

32. Justice Sands issued a final decision and judgment in 92 Montvale on July 29, 2016. More about 92 Montvale's findings of fact and conclusions of law later.

33. Chestnut Hollow appealed the Decision to this Court on August 17, 2016.

* * *

Based on the facts found after trial, the Court turns to the issues in dispute.

The Court first will clear the chaff. Chestnut Hollow's complaint contains three counts. Count I is an appeal pursuant to G.L. c.40A, § 17 from the ZBA's Decision. That appeal is properly before this Court, although the only proper defendant in that appeal is the ZBA (and not the Town). The Court will DISMISS the Town from Count I, with prejudice.

Count II purports to be an appeal under § 17 from Ms. Noble's April 1, 2016 denial of Chestnut Hollow's Application. This Court has no jurisdiction over that appeal. Chapter 40A, § 8, provides the exclusive route for appealing a denial of a building permit. That route doesn't begin at a court. Instead, it goes solely to what § 8 calls the local "permit granting authority," which in this case is the ZBA. See Quincy v. Planning Board of Tewksbury, 39 Mass. App. Ct. 17 , 20 (1995). Whether Chestnut Hollow realized it or not, its April 19, 2016 appeal to the ZBA followed § 8's path. If a § 8 appeal convinces the permit granting authority to issue a permit (as the ZBA did in this case), the building inspector's action becomes a nullity. What matters thereafter is the permit-granting authority's permit. See c. 40A, § 14. If certain parties don't like what the permit-granting authority has done, they may appeal the authority's decision to a court under § 17. That's what Count I is all about. The Court thus will DISMISS Count II for lack of jurisdiction.

Chestnut Hollow casts Count III as a claim for certiorari under G.L. c. 249, § 4. Count III identifies several errors that Chestnut Hollow asks the Court to fix by way of § 4. All of the purported errors are those of the ZBA, which (according to Chestnut Hollow) resulted in the equally erroneous Decision. Count I seeks to correct the identical errors via § 17; where a party has a reasonably adequate remedy under § 17, that party may not obtain review under § 4. See Cumberland Farms, Inc. v. Planning Bd. of Bourne, 56 Mass. App. Ct. 605 , 607-08 (2002). The Court thus will DISMISS Count III, with prejudice.

Back to Count I, Chestnut Hollow's appeal of the ZBA's Decision pursuant to § 17. In a § 17 appeal, the court must "hear all the evidence pertinent to the authority of the board . . . and determine the facts, and, upon the facts as so determined, annul such decision if found to exceed the authority of such board . . . or make such other decree as justice and equity may require." G.L. c. 40A, § 17. There is one other principle that plays a role here, primarily because this case comes in the wake of 92 Montvale. That principle is this: when a lawsuit results in a final judgment on the merits, the parties to that lawsuit aren't allowed to re-litigate, in subsequent cases involving the same parties, facts and legal issues that were essential to the judgment in the first case. See DeGiacomo v. City of Quincy, 476 Mass. 38 , 41 (2016); Petrillo v. Zoning Board of Appeals of Cohasset, 65 Mass. App. Ct. 453 , 456-58 (2006).

Curiously, the party that has argued most vociferously for issue preclusion in this case is the ZBA, and the party that has resisted preclusion is Chestnut Hollow. Their positions are curious because, at least for purposes of this case, Chestnut Hollow gets the better of the issues decided in 92 Montvale.

Recall that 92 Montvale involved an application for an LED sign displaying a message that would change every eight seconds. 92 Montvale, LLC argued in 92 Montvale that § 6.7.6 of the Bylaw allowed installation of an on-premise, LED monument sign as of right in a Commercial zoning district, provided that the sign's message didn't change less than every eight seconds. 92 Montvale rejected that interpretation of § 6.7.6, holding that a sign that changed even at eight-second intervals constituted a "flashing sign," one prohibited under § 6.7.5 of the Bylaw. See 92 Montvale, 24 LCR at 463. But wait, said 92 Montvale, LLC: the ZBA had approved plenty of signs that changed every eight seconds, so those signs couldn't be "flashing." 92 Montvale said this about that argument:

It appears . . . that every approved flashing sign cited by [92 Montvale, LLC] is either an off-premise or billboard sign [subject to § 6.7.8 of the Bylaw], or, if an on-premise sign, the applicant for such sign was either granted a variance or the sign's message changed only once per day (i.e., overnight). As a result, it appears that the ZBA has been reasonably consistent in holding that any on-premise digital sign with a changing message of any duration (except overnight) is not a valid sign under § 6.7.5 of the Bylaw. In adhering to this reasonable interpretation of the Bylaw and setting specific and uniform criteria for off-premises signs and billboards, the ZBA and the Building Inspector have been consistent in their interpretation and application of the Bylaw. . . .

92 Montvale, 24 LCR at 463 (emphases added; footnote omitted). The court further cited a legion of cases to the effect that "local zoning boards have discretion in interpreting their own zoning bylaws, and courts give deference to [those] interpretations." Id.

92 Montvale thus holds that § 6.7.5 of the Bylaw, as it existed prior to the May 2016 amendment, permits the installation of on-premise LED monument signs so long as the message displayed on such a sign changes only overnight. That holding is binding on Chestnut Hill and the ZBA, provided that the pre-May 2016 Bylaw governs Chestnut Hollow's Application.

When it issued the Decision, the ZBA assumed the old Bylaw controlled. Once Chestnut Hollow appealed, counsel for the ZBA inexplicably took the opposite view, and so the Court must decide whether the attorney or his client is right. Under Massachusetts law, the mere filing of a permit application does not give the applicant vested rights to that permit. Spector v. Bldg. Inspector of Milton, 250 Mass. 63 , 71 (1924). Instead, permit rights vest only "at the time the applicant is unconditionally entitled to its issuance." Albahari v. Zoning Bd. of Appeals of Brewster, 76 Mass. App. Ct. 245 , 250 (2010). Unconditional entitlement does require submission of a complete application (with exceptions for "routine, nondiscretionary [items] that characterize[] a ministerial function," id. at 252), but the right to a permit doesn't vest until one can conclude from the application that, under a correct interpretation of the zoning bylaw, the applicant deserves a permit. Id. at 250-52.

Ms. Noble testified that the Application was complete on the day Chestnut Hollow submitted it. 92 Montvale holds that under the Bylaw that was in effect as of February 2016, the owner of a property in a Commercial zone in Stoneham could receive a building permit for an LED monument sign provided that its message changes only once daily, and only during overnight hours. The Application says nothing about the hours Chestnut Hollow intended to operate the 41 Montvale sign, or how often its message would change, but the Town's form didn't require disclosure of that information. Had Chestnut Hollow volunteered on the Application that it intended to operate what the Bylaw treats as a "flashing" sign (as did the application in 92 Montvale), Noble would have been right in denying the Application. Denial also might have been correct had Chestnut Hollow supplemented the Application with information that made the Application clear that it sought permission for the sign to "flash." See Bylaw, § 6.7.7.1 ("Application for a sign permit shall be made in writing upon forms furnished by the Building Inspector. . . . The Building Inspector may require the filing of plans (including elevations) or other pertinent information.").

But neither of those things happened here. Instead, Ms. Noble merely inferred from Mr. Aveni's answer to her single question about 41 Montvale that Chestnut Hollow wanted permission for a sign that would change multiple times during the day. Where a facially complete building-permit application shows that the proposed structure or use, as described on the face of the application, complies with the zoning bylaw, a building inspector may not refuse the requested permit. A landowner "has a right to improve his premises by the erection and use of buildings thereon where he complies with the existing statutes and ordinances, and he is entitled to whatever permits may be necessary to enable him to exercise this right." Fellsway Realty Corp. v. Bldg. Comm'r of Medford, 332 Mass. 471 , 472 (1955). The inspector may not withhold a permit out of suspicion that mischief's afoot. "[P]rospective violations of a town bylaw are not a legally tenable ground for denial of a submission that on its face complies with applicable law." Fafard v. Conservation Com'n of Reading, 41 Mass. App. Ct. 565 , 571 (1996); see also 92 Montvale, 24 LCR at 464 n.15 (observing, in dicta, that the Town has "no basis for denying an otherwise valid sign that might have the 'ability' to violate the Bylaw if the proposal does not include such prohibited activity and the approval makes it clear that such activity is proscribed."). A municipality has plenty of powers, after it has granted a building permit, to punish misuse of a permitted structure or otherwise enforce compliance with zoning bylaws. See c. 40A, §§ 7 and 17; see also Dowd v. Board of Appeals of Dover, 5 Mass. App. Ct. 148 , 157 (1977). The municipality's arsenal doesn't include the power to withhold permits for structures and uses allowed as of right.

So the ZBA got it right the first time: because Chestnut Hollow was unconditionally entitled as of February 9, 2016 to receive a building permit for the sign described in the Application, the prior Bylaw applies, and the requested permit should have issued. Didn't the ZBA's Decision do that? Nope, argues Chestnut Hollow: the Decision granted a permit with a condition that Chestnut Hollow not operate the sign between the hours of 1:00 a.m. and 6:00 a.m. (erroneously called "6:00 p.m." in the Decision). Chestnut Hollow apparently hopes to wriggle free of those constraints.

Chestnut Hollow first contends that the ZBA had a Manichean choice: either uphold or reverse Ms. Noble's denial, with no conditions. A zoning board of appeals's powers are more nuanced than that. See G.L. c. 40A, § 14 (when exercising its responsibilities under c. 40A, § 8, "a board of appeals may . . . make orders or decisions, reverse or affirm in whole or in part, or modify any order or decision"). Chestnut Hollow next suggests that the Bylaw's prohibition on operating signs between 1:00 a.m. and 6:00 a.m. pertains only to "illuminated" signs, whereas the proposed 41 Montvale sign is a "monument" sign. The Bylaw indeed uses the adjectives "illuminated" and "monument," but not in a manner that creates two mutually exclusive categories of signs. In any event, this is one issue decided in 92 Montvale that Chestnut Hollow may not relitigate: 92 Montvale holds that the only LED monument signs allowed as of right under the prior Bylaw are those that change overnight between the hours of 1:00 a.m. and 6:00 a.m.

So the bottom line of the ZBA's Decision  stripped of its mischaracterizations of the relief Chestnut Hollow sought, cleaned of its assertions about an amended application, and modified so as to get a critical time right  is correct. In retrospect, one sees several points in this story where reasonable people on both sides of this dispute could have reached this result without having this Court impose it. Perhaps Mr. Aveni should have told Ms. Noble how Chestnut Hollow's operation of the 41 Montvale sign would differ from that at 92 Montvale. Perhaps Noble should have disclosed to Aveni that she had immediately perceived grounds for denying the Application. Perhaps former Town Counsel shouldn't have delayed Noble's action on the Application. Perhaps Aveni should have contacted Noble immediately upon realizing that she had misunderstood what the Application sought. Or perhaps new Town Counsel should have argued in this case, from the outset, that the ZBA got it right (instead of trying to defend Noble's original denial, something that even the ZBA didn't do). Instead, the parties allowed tactics to substitute for reason, and it's hard to see what they gained in return.

This Court thus will enter judgment in FAVOR of Chestnut Hollow, and AGAINST the ZBA, on Count I of Chestnut Hollow's complaint, but only so as to correct the error in the ZBA's Decision concerning the hours of operation of Chestnut Hollow's sign.